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Buy American? Not For Transit Boardmembers
George Economides - Publisher's Perspective

April 9, 2013 – The slogan “Made In America” seems to have been lost on the majority of members of the Long Beach Transit Board when they voted recently to pick a Chinese-based firm over an American-based company to build its zero-emission, all-electric buses. (See story, Long Beach Transit Sides With BYD Motors For Future Buses.)

It was another step backwards for U.S. technology, which has taken some hard hits from Chinese firms over the years.

This isn’t about which country can manufacture clothing and dust-catching items the cheapest. This is different.

This vote allows a Chinese firm a foothold in the new and potentially lucrative green bus industry. And they’re going to do it using our U.S. dollars – some 12 million of them! That just gnaws at you, doesn’t it? It’s like you got hit by the pitch and, as you’re heading to first base, the umpire slugs you in the stomach.

It is difficult to watch the video of the March 25, hours-long transit board meeting, especially when four of the five boardmembers voting to open the door for a Chinese company do not say a peep, do not explain their vote, do not acknowledge (or at least challenge) the arguments made for the American company. Heck, the board chair doesn’t even know the most elementary of Roberts Rules – that you vote on a substitute motion before the main motion. It certainly makes one pause.

Dave Roseman is right when he recommends that the board vote to re-bid the request for proposals. Roseman, a City of Long Beach employee, is a non-voting member of the board who serves as a consultant. He admits during the meeting that he has some problems with both bids – BYD Motors, the winner, and Proterra, the loser – and recommends that the board should take the next 30 days to figure out exactly what type of bus it wants, be specific (such as weight restrictions, length of bus), then go out to bid again. It appears to be a very sensible approach.

We recognize the bidder, BYD Motors, is an American subsidiary of its corporate giant, BYD in China. But it’s not like most of the other American subsidiaries of overseas corporations, which planted their roots first by investing in facilities, then went out to compete. BYD Motors does not have a plant in the U.S. (and admits it will not build one unless it gets contracts), has not built one bus in the U.S., has not been safety-certified by the U.S. government. Oh, and by the way, a BYD executive tells the transit board that the company “lost $200 million U.S. dollars; makes our financial report look very bad.” Her words.

As Boardmember Lori Ann Farrell says before the vote, “We’re chasing ghosts.” Farrell and Boardmember Maricela de Rivera, who says she uses the bus regularly, vote no on the BYD selection.

Proterra, based in South Carolina, passed U.S. safety testing more than a year ago, has manufacturing facilities in place, and its buses are currently operating in several U.S. cities with orders being filled monthly. Financially, “The team of managers who back Proterra have over $4 billion in assets” and the buses “are underwritten by a U.S. commercial bank,” a spokesman for the company explains to the board during the meeting.

The Proterra team has earned an opportunity to prove itself to the bus riders of Long Beach. Five people, who supposedly represent the best interests of the people of this city, took that opportunity away.

Long Beach Transit is a nonprofit corporation formed in 1963. Its board is usually immune from public scrutiny, primarily because those of us in the media don’t pay attention. And this issue would have slid by without notice if the Business Journal hadn’t gotten whiff of it and broken the story on March 8. While the transit staff has done a very good job over the years, and always seems to be ahead of the curve on transit issues and equipment, it’s not perfect and its recommendations should not be rubber-stamped. The board of directors must provide oversight and challenge staff to ensure that the best decisions are made.

The Long Beach City Council has no oversight of the Long Beach Transit Board, nor is there an appeals process in place. The city council does, however, make the appointments to the transit board.

When companies bid on city contracts, there is a preference given to Long Beach firms. Long Beach Transit should do the same for American companies.